Correlation Between XMX and Wormhole

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both XMX and Wormhole at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining XMX and Wormhole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XMX and Wormhole, you can compare the effects of market volatilities on XMX and Wormhole and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in XMX with a short position of Wormhole. Check out your portfolio center. Please also check ongoing floating volatility patterns of XMX and Wormhole.

Diversification Opportunities for XMX and Wormhole

XMXWormholeDiversified AwayXMXWormholeDiversified Away100%
0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between XMX and Wormhole is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding XMX and Wormhole in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wormhole and XMX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on XMX are associated (or correlated) with Wormhole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wormhole has no effect on the direction of XMX i.e., XMX and Wormhole go up and down completely randomly.

Pair Corralation between XMX and Wormhole

Assuming the 90 days trading horizon XMX is expected to generate 0.67 times more return on investment than Wormhole. However, XMX is 1.5 times less risky than Wormhole. It trades about 0.02 of its potential returns per unit of risk. Wormhole is currently generating about -0.17 per unit of risk. If you would invest  0.00  in XMX on November 23, 2024 and sell it today you would earn a total of  0.00  from holding XMX or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

XMX  vs.  Wormhole

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-200204060
JavaScript chart by amCharts 3.21.15XMX W
       Timeline  
XMX 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days XMX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for XMX shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb
Wormhole 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Wormhole has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Wormhole shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.20.250.30.350.4

XMX and Wormhole Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.99-5.99-3.98-1.970.01.783.585.397.19 0.0080.0100.0120.0140.016
JavaScript chart by amCharts 3.21.15XMX W
       Returns  

Pair Trading with XMX and Wormhole

The main advantage of trading using opposite XMX and Wormhole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XMX position performs unexpectedly, Wormhole can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wormhole will offset losses from the drop in Wormhole's long position.
The idea behind XMX and Wormhole pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges